Compensation across executive labor markets: What can we learn from cross-listed firms?

Abstract

There is wide consensus that chief executive officers (CEOs) of US firms earn significantly more than their Canadian counterparts. Using a matched sample, we find that the majority of this difference is due to US CEOs earning 50% more than CEOs of Canadian non-cross-listed firms. We find no such "US premium" for Canadian cross-listed firms, because the use of options allows the cross-listed firms to keep pace with their neighbors to the south. While firms that list only in Canada compete in the labor market defined by their national boundary, cross-listed firms appear to be competing directly with their US counterparts for executive talent. In investigating alternative explanations for the elimination of the compensation differential for Canadian cross-listed firms, we find evidence consistent with both the bonding and the rent extraction hypotheses. Journal of International Business Studies (2010) 41, 70-87. doi:10.1057/jibs.2009.34

title = "Compensation across executive labor markets: What can we learn from cross-listed firms?",

abstract = "There is wide consensus that chief executive officers (CEOs) of US firms earn significantly more than their Canadian counterparts. Using a matched sample, we find that the majority of this difference is due to US CEOs earning 50{\%} more than CEOs of Canadian non-cross-listed firms. We find no such {"}US premium{"} for Canadian cross-listed firms, because the use of options allows the cross-listed firms to keep pace with their neighbors to the south. While firms that list only in Canada compete in the labor market defined by their national boundary, cross-listed firms appear to be competing directly with their US counterparts for executive talent. In investigating alternative explanations for the elimination of the compensation differential for Canadian cross-listed firms, we find evidence consistent with both the bonding and the rent extraction hypotheses. Journal of International Business Studies (2010) 41, 70-87. doi:10.1057/jibs.2009.34",

T1 - Compensation across executive labor markets: What can we learn from cross-listed firms?

AU - Southam, Colette

AU - Sapp, Stephen

PY - 2010/1

Y1 - 2010/1

N2 - There is wide consensus that chief executive officers (CEOs) of US firms earn significantly more than their Canadian counterparts. Using a matched sample, we find that the majority of this difference is due to US CEOs earning 50% more than CEOs of Canadian non-cross-listed firms. We find no such "US premium" for Canadian cross-listed firms, because the use of options allows the cross-listed firms to keep pace with their neighbors to the south. While firms that list only in Canada compete in the labor market defined by their national boundary, cross-listed firms appear to be competing directly with their US counterparts for executive talent. In investigating alternative explanations for the elimination of the compensation differential for Canadian cross-listed firms, we find evidence consistent with both the bonding and the rent extraction hypotheses. Journal of International Business Studies (2010) 41, 70-87. doi:10.1057/jibs.2009.34

AB - There is wide consensus that chief executive officers (CEOs) of US firms earn significantly more than their Canadian counterparts. Using a matched sample, we find that the majority of this difference is due to US CEOs earning 50% more than CEOs of Canadian non-cross-listed firms. We find no such "US premium" for Canadian cross-listed firms, because the use of options allows the cross-listed firms to keep pace with their neighbors to the south. While firms that list only in Canada compete in the labor market defined by their national boundary, cross-listed firms appear to be competing directly with their US counterparts for executive talent. In investigating alternative explanations for the elimination of the compensation differential for Canadian cross-listed firms, we find evidence consistent with both the bonding and the rent extraction hypotheses. Journal of International Business Studies (2010) 41, 70-87. doi:10.1057/jibs.2009.34